Transcripts For BLOOMBERG Bloomberg Markets European Open 20

Treasuries and the dollar gain as donald trump valves to disentangle the u. S. From china. The president also suggests heavy taxes for American Companies that create jobs overseas. Of realism. The pound slides as Boris Johnson says he is prepared to walk away from the eu without a brexit deal. The you the u. K. Top negotiator meets Michel Barnier today. And Angela Merkels team refuses to rule out linking the state of novalnyeam 2 to the investigation. An hour away from the start of cash trading. At what futures are showing in europe. Gains of about 0. 4 across the board this morning on the euro stock my widely traded contracts as well as ftse and dax futures. We see u. S. Futures showing a mixed picture with nasdaq futures lower and dow futures higher. You can see nasdaq insurers have leapt up. It looks like we may not have the tech the continuation of the tech slump we saw thursday and friday. Remember, the u. S. Yesterday was lows for labor day closed for labor day. What do you see . Anna it is almost as if the u. S. Slept through. Weretime yesterday we talking about nasdaq futures down 1 . Also concern around the tech selloff going into a third day. Changed maybe was yesterday session in europe where we saw gains. A lack of tech exposure. Perhaps investors piling into europe with that in mind. Let us look at the gmm. The asian session, flat to positive. Up half a percent on the msci asiapacific. Face ofresilient in the the rhetoric of President Trump around china. Economy, something he wants to legislate around. The returning of jobs to the United States. He continues to push those themes and asian markets do not respond that much to the downside. Interesting in itself. In terms of the gmm, the pound for a second day on those top six movers. We see ongoing losses. It is down just 0. 1 . Nothing compared to yesterday. We will see where that will had. No deal brexit if required. A first word news update. Promised toump has cut americas economic ties with china. The president has threatened to punish companies that create jobs overseas. Serve in stark contrast with joe biden who has used trump think soft on china to secure the phase one trade deal. Germanys spending may become the new norm. The finance minister said the economy should not return to a balanced budget anytime soon. And that normality does not mean Angela Merkel abandoned its policy, set to borrow to counter the virus and modernizes economy. Modernize its economy. Californias power crisis is getting worse. Pg e is expected to cut power to prevent live wildfires parking sparking. A record heat wave triggered californias first rotating blackout since the 2001 energy crisis. Now windstorms threaten to trigger more blazes. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt next very much. We are getting some headlines across right now on experian raising its organic Revenue Growth forecast after strong trading. Experian now sees Second Quarter organic Revenue Growth between three and 5 to the upside. Keep an eye on that stock. I want to mention, keep an eye on the euro. ,fter we got german figures out well, let us see. 1 . Ne point the forecast had been 3. 5 , so missing. Exports up 4. 7 . Missing. The current account balance is 20 billion. We were looking for 17. 3. Numbers itn these looks like we got a little bit of a spike in the euro on that german ecodata. Right now we saw the euro jump up from loftin against the dollar to just over the line. You can see the spike on your screen nicely illustrated. On the other hand it could be a drop in the dollar for some reason. The bloomberg dollar index has come down drastically. We will see a spike in the dollar against a lot of currencies which is why you see the pound gaining and the japanese yen also gaining. Keep an eye on whats going on with currencies right now. Now. Asian stocks, what kind of they were kind of mixed this morning with equity slipping after President Trump said he intends to curb americas economic relationship with china. The pound held losses. Concern the u. K. Is inching closer to a no deal brexit. Mark cudmore on the bloomberg mliv managing editor out of singapore. Let me start with this dollar move. The dollar has just come down. We see currency spiking against it. Increasedbe expecting volatility in fx . Those are different issues. We should be seeing increased volatility, particularly sterling with the brexit risk and the ongoing tensions between the u. S. And china. The dip we saw in the last 10 minutes i cannot yet explain. Does lead to it dollar focus. Im not quite sure the reason. Isis a bizarre move, but it continuing, which does suggest that. Anna especially after a holiday in the United States. You mentioned the pound in passing. It is not all about brexit. There are plenty of other reasons to be negative on the u. K. Currency. Absolutely. It is not like many of them are new. Trading market has got along sterling. The longest in two years. Is sufferinge u. K. One of the largest economic contractions in the world. The forecast is for a 9. 87 contraction. It is not set to regain those losses in the next two years either. It has a current account deficit. It has deeply negative yields. The curve must suffer as a result. You have a bad state already. Is we have a tail risk that negative. Negotiations dont seem to be going well. Another kicker, we are seeing virus numbers start to spike. The outlook for sterling is extremely negative. Now the market is suddenly long again. With brexit negotiations, now is the time for that sterling. It is not sterling versus cable. It can be versus the euro, it can be versus other currencies. Is havingybody else issues. The brits are dealing with brexit. The u. S. Is getting into a bigger fight with china right now. European stocks kind of looking for a momentum. Our european stocks going to get the benefit of anyone else being sort of entangled with their individual problems . I think what might happen is they outperform in a risk off scenario. They dont tend to have an exciting story. They are short on the tech space. Tends risk on environment to lag and we are stuck in an in that environment, european stocks are already discounted. They are not directly in the firing line. In a risk off world european stocks are at the four. In a risk on world, there could be general excitement to buy assets. Anna thanks for joining us this morning. Stunning gains in european stocks. Note, 10 minutes past 8 00 in paris or berlin. Next, brexit is back. Sterling slumps as Boris Johnson escalates threats to leave the eu without a trade deal. Anna welcome back to the European Market open. 45 minutes to go into the start of tuesdays equity session. U. S. Trade will be back. We have one eye on whats going on with european futures and one eye on u. S. Futures. The u. K. s chief brexit negotiator has called for realism from an eu counterpart. The next round of trade talks beginning in london. He said there was still time for the sides to agree on a postbrexit trade deal for next year. A threat fromow Boris Johnson to walk away from talks. Sterling extended its drop for a fifth day. Recent moves around the dollar. We are still down. To an fx strategist at mccoury. Brexitrs are looking at negotiations and trying to work out what happens when. Boris johnson is talking about the middle of october. Michel barnier talks about the end of october. You have a date in mind in november. These things often go to the wire. What should we be looking for . Johnson has said the 15th of october. It is a cyclical basis. To have a deal by november 27. The timing needed will be important. It has not been priced in by markets yet. Of our opinion columnist suggested a no deal farit at this point is not away from the best deal johnson could get from the eu anyway. I dont know if she is just being cynical. We think we are going to see the pound work its way lower. What is the best deal the u. K. Could get . Realistically. They want a freetrade agreement. I think what has increased emphasis is the issue of aid. U. K. Companies have been blocked from receiving a during the pandemic because of eu rules. This is something that has been continuously reinforced i the eu. When it comes to a crisis time, it is that flexibility, very critical. There is increased reason why Boris Johnson will be very stringent on this. Anna it seems quite amazing that we are talking about a contested party that seems to be on this question of safe aid. For the purest it is all about having sovereignty to make any decision. Let me ask you about what the bank does. Could we get a cut in rates . I say that because that is what remains to take us down to zero. Would that do anything . Is negative Interest Rates totally off the table for the u. K. . At the last meeting they were very clear. I do think we are very nervous about negative policy rates because of the implications. Something like a micro cut could lead to gains. Any kind of economic damage in the bank of england is an outlier. Why not cut that rate back to zero . Certainly something increasing the pace of qe again. Is something that could be on the horizon. We are going to keep you with us. Coming up we are going to talk about decoupling or tariffs. Moves to curbp economic ties with china. Matt 40 minutes away from the start of cash equity trading. We had a big rally yesterday. U. S. Futures have turned higher. Stocks,as you are long there is reason to be happy. Donald trump has taken another shot at china has election rhetoric rises. He has vowed to scale back economic ties sharply with the worlds secondlargest economy, threatening to punish American Companies that do business there. Our reliance on china once and for all, whether it is decoupling or putting on the on massive tariffs like i have been doing already. We will impose tariffs on companies that deserve america to create jobs in other countries. , we cannot do it here will prohibit federal contracts for companies that outsource to china. U. S. Is also weighing a ban on products from china from over human rights concerns. What do you think about the ramped up rhetoric . How much of a problem is this for risk assets . Be increased rhetoric ahead of the u. S. President ial election. I dont see it having too much of a negative impact that this moment in terms of high data fx. Probablyconcern is whether we will have a certain election or whether it will be contested. Ofcould face the prospect not knowing who the next president will be. You see that us dollar negative. I know you have in your mind a number of reasons to be dollar negative right now. How does the trajectory of the virus and the bureaucracy of that play into your thinking . We are seeing a bullish move ahead of the u. S. Election. Where the central if you the lower bound, look at the economic supplies u. S. Data is outperforming market expectations. Ofhave dealt with the brunt the impact from coronavirus. We have had a very pure labor market shot. We see recovery in the u. S. Gaining momentum. The same time coronavirus cases are accelerating. Matt lets talk about em. Maybe one currency that has escaped dollar weakness. What do you think about that . It was kind of the biggest move in the emfx complex. That are going to see catchup in terms of the brand the South African rand we do think the next stage of recovery will be a lot harder to sustain. There will be also increased focus on the fundamentals. T will be interesting is there are very attractive yields. Basically it trades back in line with market fundamentals. Thanks very much for your time. Very good to speak to you. Just to qualify her dollar bullish position. Lets have a look at futures. European equity market futures to the upside. The frenzy was not around tech, and if anything, there was little fear around tech, but today looks different in terms of u. S. Futures. Matt absolutely. You have seen nasdaq futures turn higher. They were lower minutes before the show started. , i seest thing i checked a slight red arrow. The first thing i checked was to see if nasdaq futures would still be off. The risk on mood everywhere else seems pervasive. It is very interesting. Ask about the nasdaq wheel theory later. Bloombergome back to markets. This is the european open. Lets take a look at todays key events that could shape the day. The latest round of brexit negotiations get underway in london later. We will get our final reading on euro area gdp for the Second Quarter at 10 00 this morning. Get0 30 in london, we will an idea of how the South African economy is faring after one of the toughest lockdowns in the world. It is expected to contract by an annualized 31. 9 . Olaf shonance minister lz will discuss in a bloomberg webinar. The u. S. Senate returns from recess. Nancy pelosi joins bloomberg after 5 00 p. M. London time to discuss issues surrounding the second stimulus package. At six but 6 00 p. M. London time Jeff Gundlach speaks on the total return bond fund. That is your day ahead. Lets get your Bloomberg Business flash. Is doubling up from 25 previously. Trading staff are already coming into the london office. A tech giant has been in talks to leave 200,000 square feet of space in what wouldve been one of the biggest real estate deals in years. As decision will be watched investors weigh the impact of coronavirus on the city. An unusual online releases helping drive demand. The release was friday after the pandemic delayed the u. S. Theatrical really. Customers were required to pay an additional 30 to see the film, an approach the company has not attempted before. Anna thanks very much. The german chancellor is considering action against the nord stream 2 gas pipeline after the poisoning of alexey navalny. Angela merkel supported comments by the foreign minister who warned berlin could change its backing, underscoring the escalating tensions with moscow. Polands Prime Minister described the decision as a nybrainer and says the naval case should be a final wakeup call for germany. Seexpects his country will the softest recession in the eu and is not concerned about the level of the currency. I place which is good for the economy, we dont intervene in , eitherke this unexpected developments, are central bank does not exclude intervention. Franc is an important issue in the polish economy. Having said that, we are not concerned. It is good for the stability of our economy for our export industry and at the same time, it does have the possible the potential for strength. Across the board or in germany there is increasing pressure on chancellor Angela Merkel to abandon the nord stream 2 project. What has been the polish government stands for years. Convince you try to germany to drop this project . I think it should be a nobrainer. Is a very sad example of how russia is treating its citizens and opposition leaders. Condemned not only condemned, but it should be very strong sanctions and interventions following suit. And here i believe that hearing what german leaders are saying, i think the decisionmakers will change their decisions. They already by the same token finally admitted this is a political project. I mean the nord stream 2 project. With the recent development in mr. Where mr. Pruden navalnwhat he did to mr. Y, this should be a final wakeup call for germany in terms of the eu and german attitude towards nord stream 2. Do you think germany would be able to what would be the consequences if they did cut off work on nord stream 2 . We have lots of connectivity. In particular the nord stream 2 project is dangerous for ukraine. They are going to become fitly cut off from their transit capacities. A gas Pipeline System was built for to transit gas to western europe. Obsolete, they will experience huge growth. There will beme for the first time a situation where Russian Troops and russia will be able to march into a territory in the east because they will no longer be dependent on the gas Pipeline System. With its 552 billion cubic meters of gas is threat, itpolitical is a geopolitical threat to this part of the world. It should be stopped as quickly as possible. That was the polish Prime Minister speaking exclusively to bloomberg. Let us continue the conversation on nord stream 2. Joining us now is an Energy Analyst at the German Institute for International Social affairs. My first question really is about the Energy Security in germany. How important is this pipeline to keep powering germany . Can it be done without nord stream 2 . It can be done without nord stream 2. Re are other pipe liens pipelines like nord stream 2 and. The assessment is it can do, but the pipeline would have positively affect in economic terms with regard to gas prices. The way ahead for the German Government is not an easy one. Anna i read some analysis that suggests one way here is to build the nord stream 2 pipeline but not to use it, not to buy gas through it. What kind of geopolitical signal is that sending . Would that result in just buying gas through the existing pipelines in which case, what difference would it make . Yes, indeed. Putting a moratorium on it would not mean they buy less gas. The kremlin mean gets less euros for natural gas. The is the point, stopping nord stream 2 pipeline would be politicallygh loaded signal. That would be the message. U. S. Has been pushing for this long before Angela Merkel felt the weight of the poisoning. How much lng could be sold into germany out of oklahoma . Is that part of the play . I think it is part of the play but on the u. S. Side. A lot of motivations coming together. With regard to the sanctions and the secondary effect on the nord been a plays always of prices. We see more lng coming into the American Companies<\/a> that create jobs overseas. Of realism. The pound slides as Boris Johnson<\/a> says he is prepared to walk away from the eu without a brexit deal. The you the u. K. Top negotiator meets Michel Barnier<\/a> today. And Angela Merkels<\/a> team refuses to rule out linking the state of novalnyeam 2 to the investigation. An hour away from the start of cash trading. At what futures are showing in europe. Gains of about 0. 4 across the board this morning on the euro stock my widely traded contracts as well as ftse and dax futures. We see u. S. Futures showing a mixed picture with nasdaq futures lower and dow futures higher. You can see nasdaq insurers have leapt up. It looks like we may not have the tech the continuation of the tech slump we saw thursday and friday. Remember, the u. S. Yesterday was lows for labor day closed for labor day. What do you see . Anna it is almost as if the u. S. Slept through. Weretime yesterday we talking about nasdaq futures down 1 . Also concern around the tech selloff going into a third day. Changed maybe was yesterday session in europe where we saw gains. A lack of tech exposure. Perhaps investors piling into europe with that in mind. Let us look at the gmm. The asian session, flat to positive. Up half a percent on the msci asiapacific. Face ofresilient in the the rhetoric of President Trump<\/a> around china. Economy, something he wants to legislate around. The returning of jobs to the United States<\/a>. He continues to push those themes and asian markets do not respond that much to the downside. Interesting in itself. In terms of the gmm, the pound for a second day on those top six movers. We see ongoing losses. It is down just 0. 1 . Nothing compared to yesterday. We will see where that will had. No deal brexit if required. A first word news update. Promised toump has cut americas economic ties with china. The president has threatened to punish companies that create jobs overseas. Serve in stark contrast with joe biden who has used trump think soft on china to secure the phase one trade deal. Germanys spending may become the new norm. The finance minister said the economy should not return to a balanced budget anytime soon. And that normality does not mean Angela Merkel<\/a> abandoned its policy, set to borrow to counter the virus and modernizes economy. Modernize its economy. Californias power crisis is getting worse. Pg e is expected to cut power to prevent live wildfires parking sparking. A record heat wave triggered californias first rotating blackout since the 2001 energy crisis. Now windstorms threaten to trigger more blazes. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt next very much. We are getting some headlines across right now on experian raising its organic Revenue Growth<\/a> forecast after strong trading. Experian now sees Second Quarter<\/a> organic Revenue Growth<\/a> between three and 5 to the upside. Keep an eye on that stock. I want to mention, keep an eye on the euro. ,fter we got german figures out well, let us see. 1 . Ne point the forecast had been 3. 5 , so missing. Exports up 4. 7 . Missing. The current account balance is 20 billion. We were looking for 17. 3. Numbers itn these looks like we got a little bit of a spike in the euro on that german ecodata. Right now we saw the euro jump up from loftin against the dollar to just over the line. You can see the spike on your screen nicely illustrated. On the other hand it could be a drop in the dollar for some reason. The bloomberg dollar index has come down drastically. We will see a spike in the dollar against a lot of currencies which is why you see the pound gaining and the japanese yen also gaining. Keep an eye on whats going on with currencies right now. Now. Asian stocks, what kind of they were kind of mixed this morning with equity slipping after President Trump<\/a> said he intends to curb americas economic relationship with china. The pound held losses. Concern the u. K. Is inching closer to a no deal brexit. Mark cudmore on the bloomberg mliv managing editor out of singapore. Let me start with this dollar move. The dollar has just come down. We see currency spiking against it. Increasedbe expecting volatility in fx . Those are different issues. We should be seeing increased volatility, particularly sterling with the brexit risk and the ongoing tensions between the u. S. And china. The dip we saw in the last 10 minutes i cannot yet explain. Does lead to it dollar focus. Im not quite sure the reason. Isis a bizarre move, but it continuing, which does suggest that. Anna especially after a holiday in the United States<\/a>. You mentioned the pound in passing. It is not all about brexit. There are plenty of other reasons to be negative on the u. K. Currency. Absolutely. It is not like many of them are new. Trading market has got along sterling. The longest in two years. Is sufferinge u. K. One of the largest economic contractions in the world. The forecast is for a 9. 87 contraction. It is not set to regain those losses in the next two years either. It has a current account deficit. It has deeply negative yields. The curve must suffer as a result. You have a bad state already. Is we have a tail risk that negative. Negotiations dont seem to be going well. Another kicker, we are seeing virus numbers start to spike. The outlook for sterling is extremely negative. Now the market is suddenly long again. With brexit negotiations, now is the time for that sterling. It is not sterling versus cable. It can be versus the euro, it can be versus other currencies. Is havingybody else issues. The brits are dealing with brexit. The u. S. Is getting into a bigger fight with china right now. European stocks kind of looking for a momentum. Our european stocks going to get the benefit of anyone else being sort of entangled with their individual problems . I think what might happen is they outperform in a risk off scenario. They dont tend to have an exciting story. They are short on the tech space. Tends risk on environment to lag and we are stuck in an in that environment, european stocks are already discounted. They are not directly in the firing line. In a risk off world european stocks are at the four. In a risk on world, there could be general excitement to buy assets. Anna thanks for joining us this morning. Stunning gains in european stocks. Note, 10 minutes past 8 00 in paris or berlin. Next, brexit is back. Sterling slumps as Boris Johnson<\/a> escalates threats to leave the eu without a trade deal. Anna welcome back to the European Market<\/a> open. 45 minutes to go into the start of tuesdays equity session. U. S. Trade will be back. We have one eye on whats going on with european futures and one eye on u. S. Futures. The u. K. s chief brexit negotiator has called for realism from an eu counterpart. The next round of trade talks beginning in london. He said there was still time for the sides to agree on a postbrexit trade deal for next year. A threat fromow Boris Johnson<\/a> to walk away from talks. Sterling extended its drop for a fifth day. Recent moves around the dollar. We are still down. To an fx strategist at mccoury. Brexitrs are looking at negotiations and trying to work out what happens when. Boris johnson is talking about the middle of october. Michel barnier talks about the end of october. You have a date in mind in november. These things often go to the wire. What should we be looking for . Johnson has said the 15th of october. It is a cyclical basis. To have a deal by november 27. The timing needed will be important. It has not been priced in by markets yet. Of our opinion columnist suggested a no deal farit at this point is not away from the best deal johnson could get from the eu anyway. I dont know if she is just being cynical. We think we are going to see the pound work its way lower. What is the best deal the u. K. Could get . Realistically. They want a freetrade agreement. I think what has increased emphasis is the issue of aid. U. K. Companies have been blocked from receiving a during the pandemic because of eu rules. This is something that has been continuously reinforced i the eu. When it comes to a crisis time, it is that flexibility, very critical. There is increased reason why Boris Johnson<\/a> will be very stringent on this. Anna it seems quite amazing that we are talking about a contested party that seems to be on this question of safe aid. For the purest it is all about having sovereignty to make any decision. Let me ask you about what the bank does. Could we get a cut in rates . I say that because that is what remains to take us down to zero. Would that do anything . Is negative Interest Rates<\/a> totally off the table for the u. K. . At the last meeting they were very clear. I do think we are very nervous about negative policy rates because of the implications. Something like a micro cut could lead to gains. Any kind of economic damage in the bank of england is an outlier. Why not cut that rate back to zero . Certainly something increasing the pace of qe again. Is something that could be on the horizon. We are going to keep you with us. Coming up we are going to talk about decoupling or tariffs. Moves to curbp economic ties with china. Matt 40 minutes away from the start of cash equity trading. We had a big rally yesterday. U. S. Futures have turned higher. Stocks,as you are long there is reason to be happy. Donald trump has taken another shot at china has election rhetoric rises. He has vowed to scale back economic ties sharply with the worlds secondlargest economy, threatening to punish American Companies<\/a> that do business there. Our reliance on china once and for all, whether it is decoupling or putting on the on massive tariffs like i have been doing already. We will impose tariffs on companies that deserve america to create jobs in other countries. , we cannot do it here will prohibit federal contracts for companies that outsource to china. U. S. Is also weighing a ban on products from china from over human rights concerns. What do you think about the ramped up rhetoric . How much of a problem is this for risk assets . Be increased rhetoric ahead of the u. S. President ial election. I dont see it having too much of a negative impact that this moment in terms of high data fx. Probablyconcern is whether we will have a certain election or whether it will be contested. Ofcould face the prospect not knowing who the next president will be. You see that us dollar negative. I know you have in your mind a number of reasons to be dollar negative right now. How does the trajectory of the virus and the bureaucracy of that play into your thinking . We are seeing a bullish move ahead of the u. S. Election. Where the central if you the lower bound, look at the economic supplies u. S. Data is outperforming market expectations. Ofhave dealt with the brunt the impact from coronavirus. We have had a very pure labor market shot. We see recovery in the u. S. Gaining momentum. The same time coronavirus cases are accelerating. Matt lets talk about em. Maybe one currency that has escaped dollar weakness. What do you think about that . It was kind of the biggest move in the emfx complex. That are going to see catchup in terms of the brand the South African<\/a> rand we do think the next stage of recovery will be a lot harder to sustain. There will be also increased focus on the fundamentals. T will be interesting is there are very attractive yields. Basically it trades back in line with market fundamentals. Thanks very much for your time. Very good to speak to you. Just to qualify her dollar bullish position. Lets have a look at futures. European equity market futures to the upside. The frenzy was not around tech, and if anything, there was little fear around tech, but today looks different in terms of u. S. Futures. Matt absolutely. You have seen nasdaq futures turn higher. They were lower minutes before the show started. , i seest thing i checked a slight red arrow. The first thing i checked was to see if nasdaq futures would still be off. The risk on mood everywhere else seems pervasive. It is very interesting. Ask about the nasdaq wheel theory later. Bloombergome back to markets. This is the european open. Lets take a look at todays key events that could shape the day. The latest round of brexit negotiations get underway in london later. We will get our final reading on euro area gdp for the Second Quarter<\/a> at 10 00 this morning. Get0 30 in london, we will an idea of how the South African<\/a> economy is faring after one of the toughest lockdowns in the world. It is expected to contract by an annualized 31. 9 . Olaf shonance minister lz will discuss in a bloomberg webinar. The u. S. Senate returns from recess. Nancy pelosi joins bloomberg after 5 00 p. M. London time to discuss issues surrounding the second stimulus package. At six but 6 00 p. M. London time Jeff Gundlach<\/a> speaks on the total return bond fund. That is your day ahead. Lets get your Bloomberg Business<\/a> flash. Is doubling up from 25 previously. Trading staff are already coming into the london office. A tech giant has been in talks to leave 200,000 square feet of space in what wouldve been one of the biggest real estate deals in years. As decision will be watched investors weigh the impact of coronavirus on the city. An unusual online releases helping drive demand. The release was friday after the pandemic delayed the u. S. Theatrical really. Customers were required to pay an additional 30 to see the film, an approach the company has not attempted before. Anna thanks very much. The german chancellor is considering action against the nord stream 2 gas pipeline after the poisoning of alexey navalny. Angela merkel supported comments by the foreign minister who warned berlin could change its backing, underscoring the escalating tensions with moscow. Polands Prime Minister<\/a> described the decision as a nybrainer and says the naval case should be a final wakeup call for germany. Seexpects his country will the softest recession in the eu and is not concerned about the level of the currency. I place which is good for the economy, we dont intervene in , eitherke this unexpected developments, are central bank does not exclude intervention. Franc is an important issue in the polish economy. Having said that, we are not concerned. It is good for the stability of our economy for our export industry and at the same time, it does have the possible the potential for strength. Across the board or in germany there is increasing pressure on chancellor Angela Merkel<\/a> to abandon the nord stream 2 project. What has been the polish government stands for years. Convince you try to germany to drop this project . I think it should be a nobrainer. Is a very sad example of how russia is treating its citizens and opposition leaders. Condemned not only condemned, but it should be very strong sanctions and interventions following suit. And here i believe that hearing what german leaders are saying, i think the decisionmakers will change their decisions. They already by the same token finally admitted this is a political project. I mean the nord stream 2 project. With the recent development in mr. Where mr. Pruden navalnwhat he did to mr. Y, this should be a final wakeup call for germany in terms of the eu and german attitude towards nord stream 2. Do you think germany would be able to what would be the consequences if they did cut off work on nord stream 2 . We have lots of connectivity. In particular the nord stream 2 project is dangerous for ukraine. They are going to become fitly cut off from their transit capacities. A gas Pipeline System<\/a> was built for to transit gas to western europe. Obsolete, they will experience huge growth. There will beme for the first time a situation where Russian Troops<\/a> and russia will be able to march into a territory in the east because they will no longer be dependent on the gas Pipeline System<\/a>. With its 552 billion cubic meters of gas is threat, itpolitical is a geopolitical threat to this part of the world. It should be stopped as quickly as possible. That was the polish Prime Minister<\/a> speaking exclusively to bloomberg. Let us continue the conversation on nord stream 2. Joining us now is an Energy Analyst<\/a> at the German Institute<\/a> for International Social<\/a> affairs. My first question really is about the Energy Security<\/a> in germany. How important is this pipeline to keep powering germany . Can it be done without nord stream 2 . It can be done without nord stream 2. Re are other pipe liens pipelines like nord stream 2 and. The assessment is it can do, but the pipeline would have positively affect in economic terms with regard to gas prices. The way ahead for the German Government<\/a> is not an easy one. Anna i read some analysis that suggests one way here is to build the nord stream 2 pipeline but not to use it, not to buy gas through it. What kind of geopolitical signal is that sending . Would that result in just buying gas through the existing pipelines in which case, what difference would it make . Yes, indeed. Putting a moratorium on it would not mean they buy less gas. The kremlin mean gets less euros for natural gas. The is the point, stopping nord stream 2 pipeline would be politicallygh loaded signal. That would be the message. U. S. Has been pushing for this long before Angela Merkel<\/a> felt the weight of the poisoning. How much lng could be sold into germany out of oklahoma . Is that part of the play . I think it is part of the play but on the u. S. Side. A lot of motivations coming together. With regard to the sanctions and the secondary effect on the nord been a plays always of prices. We see more lng coming into the European Market<\/a>s. This was also the major message out of berlin. Let the markets work. For germany this would really be a paradigm shift. Anna what do you think germany would like russia to say or do here . Other European Countries<\/a> are coming out saying what they think has happened. You are asking an Energy Analyst<\/a> here. In othere have seen locations, a transparent answer. It is very difficult what you can expect out of russia. Very difficult to predict. As an Energy Analyst<\/a>, following unpredictable event set russia in the past. Thanks for joining us. Coming up on the program, President Trump<\/a> vows to curb economic ties with china as he ramps up his election rhetoric. Anna futures in europe have been pointing to the upside. They continue to do so, 0. 3 . U. S. Futures flat. Lets get a bloomberg first word news update. A deputy finance ministers has the economy should not return to a balanced budget anytime soon. Chancellor Angela Merkels<\/a> government abandoned its is seted zero policy and to borrow to counter the virus and modernize its economy. Argentina has emerged. The country ated sea plus with a stable outlook. The upgrade is the culmination of four months of negotiations with argentinas biggest creditors. Bonds were issued to replace securities that have been in default since may. Californias power crisis is getting worse. Pg e expects to cut electricity to more than half a Million People<\/a> to prevent live wires from sparking wildfires. A tumultuousest in run from a disaster we restate. Weary state. Windstorms threaten to create more blazes. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thanks very much. Trump has taken another shot at china as the election rhetoric rises in america. He has vowed to scale back economic ties with the country by threatening to punish u. S. Companies that create jobs overseas. He also threatens to prevent those who do business with beijing from winning federal contracts. Pres. Trump we will end our reliance on china once and for all, whether it is decoupling or putting in massive tariffs like i have been doing already, we will impose tariffs on companies that deserve america to create jobs in china and other countries. If they cannot do it here, let them have big taxes. We will prohibit federal contracts from companies that outsource to china. Matt in terms of trade, what is at stake . A great deal. This would really be a decoupling kind of move, something the hawks in President Trump<\/a>s administration have long wanted. They would actually try to untangle their economies and step back from doing trade, which of course is something President Trump<\/a> tried to have trade agreements with china at the same time he heightened the rhetoric. In recent months, trade has fallen by the wayside. It is unclear whether that is one trade agreement, that limited trade agreement they negotiated last year and went into effect in january has had much of an effect. The two countries would be moving further away from one another if these kinds of rules took effect. President trump did not say when this would take effect. He tried to paint this as part of a second term kind of strategy. If he was to win in november. Good morning to you. How does President Trump<\/a> differ from nominee biden in terms of the stance on china . We heard a lot from trump about trying to incentivize job creation in the u. S. , to encourage u. S. Businesses to create jobs in the u. S. Is that something joe biden has spoken about . ToPresident Trump<\/a> in trying paint himself as different from his opponent joe biden has tried to portray the democrat as being soft on beijing and that is something that biden himself has tried to turn around, saying trump was soft on china when he wanted to do trade with china and even tried to get close with the chinese president xi jinping. But now that he is not trying to do that anymore, he is toughening his stance because his administration has lost control of the coronavirus outbreak. They are trying to paint each other as soft on certain issues, but joe biden, i think we will be hearing a lot more from him in coming weeks. We have two months of the campaign left. This is an issue for him. How would he deal with china, and how would his Administration Deal<\/a> with trade . Not only with china, but on the world stage and in asia. Matt im sure we are past the point where real decoupling is even possible. This see problems with relationship no matter who wins the election . I think so. It is fraught with all kinds of things. The more this rhetoric has taken hold, and not only the rhetoric, but now we are seeing china delay credentials for journalists with u. S. Media outlets, also australias reporters have left. Issue in thethis south china sea. We have seen a lot of things going on. It is going to be hard to see how you put that back to feathery back together again. You cannot really decouple these economies from one another, but how this works and especially how it works in terms of trade and trade agreements is going to be very complicated. Thanks very much. Our Senior International<\/a> editor on the latest. Coming up, Boris Johnson<\/a> ratchets up the chances of a no deal brexit. We take a look at sterling in your morning call. What analysts are saying about that pair and get your stocks to watch. This is bloomberg. Anna this Tuesday Morning<\/a> expecting European Equity<\/a> markets to pounce at the start of trade. Futures up by 0. 3 . Sterling declines are piling up as Boris Johnson<\/a> increases the odds of leaving the eu without a deal. He is willing to walk away from. He talks joining us to discuss, dani burger who has been looking at the commentary from various traders, investors, around this. Just how negative has the sentiment turned against sterling . , fallinge seen a shift from recent highs about 1 overnight, but here is the thing. We certainly could see sentiment get even worse. From credit agricole, cable falling one spot 20. This could be the start of a correction. The pound does not look that discounted compared to the euro. According to the imf, based on trade metrics, the pound is actually more expensive than the yen. Traders,c of active the net long is the highest in two years. That really bearish sentiment we had has all but disappeared. We could definitely see more falls. So, those are, the calls, what are the stocks you are watching . Experian raised its forecast. Thats right. There forecast for the upcoming order, seeing organic growth growing at 3 to 5 , previously it was down. The really is thanks to better trading they have seen over the past two months. See weakness. Ould another sector to watch. The recovery appears to be slowing. Saysan aviation group, these groups have cut capacity. Oag is seeing credit downgraded from moodys. Easyjet says 40 or less capacity is what we can expect in the Fourth Quarter<\/a> ended is not maintaining guidance thing it cannot give it to us for this and next year. Ofa on the subject aviation, iag says ryanair is cutting on that sector. Easyjet cuts. We have the market open next. European equity markets expected to show resilience. Returnt a wait for the of the president of the United States<\/a> of the United States<\/a>. Nasdaq futures flat. Dow futures point to the upside. A little bit of strength. Where will that all important tech trade go during this week . This is bloomberg. The big events are back. Xfinity is your home for the return of live sports. So youre a small bor a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network<\/a> in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Anna a minute to go until the start of cash equity trading. Social distancing. The dollar gains as donald trump valves to further distance the u. S. From china. He also suggests heavy taxes for companies that create jobs overseas. A dose of realism. The pound slides as johnson says he is prepared to walk away from the eu without a deal. Meetings today. And a nobrainer. Angela merkel seems to refuse to link nord stream 2 with the poisoning situation. The polish Prime Minister<\/a> says the choice is simple. Future suggest little upside here. A gain in u. S. Futures as we head to the live cash trade. The market is now open. Take a look at the global macro mover screen. A slew of risk assets in each column. Far left the yang equity indexes. The ftse is up 0. 2 . Stronger gains in futures for german stocks than we did for example, french stocks. The cac futures were bouncing back and forth between gains and losses at the open. Opening unchanged. Unchanged at the open as the ftse starts to gain some strength. One third of 1 as we see other continental indexes showing little change. We should see gains in italy. The futures contracts there were to theularly bid in open. 0. 4 . Up as i said, it looks like you will see german stocks open a little higher as well. Market generally up. U. S. Futures are climbing with asian stocks despite fresh u. S. China tensions and the recent selloff that the end of last week in u. S. Tech shares. Joining us now is kallum pickering, berenberg senior economist. For a while it looked like the end of the rally but it looks now like the risk on new is still in tact. What you think that says animal spirits seem strong even in the midst of this covid, this unprecedented crisis . Kallum there is a fundamental argument or investing which is we seem to have done a pretty good job of ensuring an economic recovery and major parts of the world and it is unlikely we have done much damage to capital stocks. From a technical point of view, view isation point of limited. It seems to be a freely Good Environment<\/a> for equities. The caveat is there are a lot of politics to worry about with trade wars and brexit. It is a mostly be returned to normal. It is almost like a return to normal. Anna almost but not quite. What kind of shape do you attribute to the recovery . Some of the timing you same to have in mind, looking at your notes, is that a v . Analysts have used the alphabet. We dont have anything left. Economies will recover their full potential from the recession but it takes roughly three years for most economies. Within six months, two thirds of the recovery will happen. It will look like a v but the remaining third will take a few more years. 2022, the u. S. Will get back to q4 2019. For the u. K. , 2023. Matt are we going to see any kind of inflation . There is so much concern about it. You can understand why as we see debt to gdp climbing in some cases to 200 in some major economies. You expect these countries to start printing money and devalue with the currency . It seems there only way out. And yet, it does not seem like anyone expects real inflation. Kallum it is still a disinflationary shock. I think it is widely believed that three years from now, we will have more Inflationary Pressure<\/a> than what we have seen in the last 10 years. Environment on balance is more conducive to core rates around 2. 5 whereas over the last decade, it has been more like 1. 5 . We are going from a disinflationary environment to a modest inflationary environment. As long as Central Banks<\/a> remain independent, it is highly unlikely that inflation will take off in a major way. Anna what do we need to watch in terms of that independence . You made a point of saying that we should not worry too much about debt levels but Government Debt<\/a> is piling up. Governments in western economies doing what they think is appropriate to support their people. Whathould we not worry or time horizon should we be worried about acting on that debt . Kallum take italy for example. Or the u. S. And a bit the u. K. With a structural budding deficit and you have added a lot to your debt pile, you will need to do some fiscal retrenchment at some point. But if you entered this season with stability and you added a lot of debt which basically found its way onto the ecb balance sheet. And once you have recovered, you are back in a sustainable economic position, you wont feel any urgency to do what the debt. Only if you need to slow down the economy. The higher public debt does not cause economies in major problem for economies though that have an unstable fiscal outlook, there is a problem. Matt im wondering about consumption and production. You point out that people are going to go back to buying but shopkeepers will be reluctant to put big orders in in case there is a second wave and they face another lockdown. I went to the bmw dealership yesterday looking for a new motorcycle and they said they are not even making them right now because they dont know what kind of demand to expect. Will that be a problem in the next few months . Kallum in the near term, we will probably see a slightly larger gap between the data. We still have some spare capacity, some stock lying around we did not consume during the lockdown. What, the economy continues to recover and we dont get major lockdowns, the orders will pick up because retailers will become more demandnt that sustained will continue. Months. Take 46 in consumer economies, spending leads the way. Anna thank you very much. Kallum pickering, berenberg senior economist with us a little bit longer. Seven minutes past 8 00 in london. Coming up, sterling slumping. That has been the theme this week. The pound is about 0. 2 against the u. S. Dollar. Boris johnson ratchets up the chances of a no deal brexit. We discuss that next. This is bloomberg. Our base case is a semimanaged one. We opened they will come up with a deal and the challenges are too difficult. It will not be complete chaos on january 1. There will be a patchwork of modest stopgap measures that both sides will agree to to see to it that the heart exit is managed in stages. Various protocols for the most sectors treated a 60 probability on that. The outside risk is theres a 30 chance we get some kind of deal or partial deal in time for january 1. That would be the trade deal with all the bells and whistles for information and all the rest of it. This is what is coming to focus over the last couple oil days. The disorderly heart exit. U. K. Leavese the the eu market but very few or no stopgap measures in the industry. For that, we put a 5 risk on it. We dont think it is very likely but the tensions are very high. We do worry if the Political Trust<\/a> deteriorates even further, both sides heading into a heart exit in the end will not be very generous to each other when it comes to the stopgap measures. Managedemip power decks looks on the soft side of the spectrum. What does that mean on january 1 . You can still use your bank card abroad . What is the extent of kallum all of that has happened because all of the necessary regulators use their discretion to allow things to continue not quite as normal. For instance, financial services. I like to think the derivatives for Continental Europe<\/a> would still be able to clear but it may just be the case that if you are based in london, to be compliant with eu regulations, you have 612 months to do that. When it comes to checking goods, entering the market via the channel, you better check every truck that crosses the border. Maybe for the time being, you untiljust 10 of those the system can manage the borders or efficiently. What we are betting on is that both sides will use their discretion to live in fact that on january 1, regulations in the u. K. And the eu will be identical. It will be possible to use some political will in order to ease this transition. Managed hardis the recovery think would be disrupted much because there is so much potential. Exit orong run, a hard no deal what hurt the u. K. Badly in potential growth terms. Lowering it to around 1. 5 . By comparison, inside the eu, 2. 1 . That is the big hit. Businesses nowe realizing this and moving as quickly as they can . A lot of things we hear on the continent order on the internet come from the u. K. They will have to be moved or they will lose the business because no one wants to pay and next are 20 in customs on top of the goods they are ordering. Kallum think about brexit in terms of growth rather than in terms of a big hit to the u. K. Economy. Brexit willct is lower the rate at which trade between the u. K. And eu gross. The net effect is negative in growth terms but across industries both within the u. K. And europe there will be some winners and losers. Trade diversion between the two areas from u. K. Companies that are outcompeted by European Union<\/a> companies. Orders will be a little higher so u. K. Companies may source them at home. The same will happen in eu. Ratherll slow growth than caused a big economic hit in the near term. The economy will not leave heading to the eu market. Thank you very much. Kallum pickering, ehrenberg senior economist. Interesting to get your perspective and the best Case Scenario<\/a> you see. Kallum pickering will be joining us 9 00 a. M. On bloomberg radio. 20is just coming up on minutes past 8 00 in london. A skyrocketing of cases in india a clip thing the u. S. This is bloomberg eclipsing the u. S. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. 22 minutes into the session. The dax and the cac have turned negative after a positive open. The ftse still gaining 0. 25 . Maria tadeo is in brussels. An actionworking on plan to implement it. There should be investments and infrastructure and human capital. There will be structural shifts and workers will be able to adjust. It is important to preserve the integrity of the single market. Asset to steer us through rough seas. Ladies and gentlemen, when the inmission entered office what we presented our goals of making europes economy greener. The crisis has not changed this ambition. In fact, the profound Socioeconomic Impact<\/a> means it is more urgent to act. The green and digital transitions hold the key to europes future. We have been working a great deal to promote Sustainable Finance<\/a> and green corporation. We need to push ahead with Energy Efficiency<\/a> products and Renewable Energy<\/a> and much more. The financing and Investment Decisions<\/a> we are taking now will help significantly on gas emissions into the next decades. To take full advantage of these opportunities, we need to improve the economy across europe and investing in new technologies like artificial intelligence, and robots. Can increase the competitiveness and resilience as well as create new sources of jobs. With as comes at heavy price tag. Pandemic,ing with the coffers have been depleted. Public sector is doing what it can to help. The eu recovery package to support our climate objectives. The highest share of a european budget allowed. Public money on its own will not be enough. Andlso need largescale forwardlooking investment from the private sector. Was the European Commission<\/a>er speaking with our , maria tadeo in brussels. That conversation is ongoing. Back to the markets. European equity markets trading to the downside. We had started stronger this morning but as nasdaq futures have ticked down, we have also take down here in europe. Dani burger has more. Experience is trading at a record high up nearly 3 after it upgraded its guidance for the Second Quarter<\/a>. It says it now sees organic growth between 3 5 . Before it had been flat to down. Before it got a boost from the mortgage market. The french losers Electricity Company<\/a> offering convertible bonds of 2. 4 billion euros. Whether types of things it is new stock issuance or convertible bonds, we tend to see stocks declining which they are. Falling 5. 5 . The french government owns 87 of the company and it will put up a portion of that. Easyjet giving an update on trading. Saying it will not be able to give new guidance. Berger looking at those movers for us. To scale trump valves back americas ties with china. We bring you the latest from hong kong. This is bloomberg. Anna welcome back to the European Market<\/a> open. European equity markets off their earlier high. They started in positive territory. The ftse is still up about 0. 6 percent. I wonder if the pound weakness has anything to do with that. The sector picture overall a bit of a drift. The u. S. Equity markets were closed yesterday. Europe the sectors in europe are inconclusive. Is to thelogy downside. Nasdaq futures down by 0. 2 and technology is the biggest losing along withurope Construction Materials<\/a> and utility stocks. Telecom to the upside as well as banks and insurance. Matt . Matt india has become the latest global epicenter of the coronavirus having more than 80,000 confirmed infections each day putting it on track to over overtake the u. S. Bloomberg european consumer and Health Care Editor<\/a> eric joins us now to talk about this. First off, what do we see happening throughout india . Of their a huge part population in numeral areas. A huge partight of their population in rural areas. That is right. There is not the same access to hygiene and health care. That is aging the spread there and it will be on track with 80,000 each day to spread quickly. Exponentially through the population there. Very unfortunate situation where it is on track to pass the u. S. Pretty soon. To attractntinue what is happening in india. Closer to us here in europe, what is the latest on the european story . Through the Summer Holiday<\/a> season. How has that left europe looking . A little alarming. Resurgence here as well especially in places like france and spain and to some extent in the u k and germany. You are seeing a pretty broadbased insurgents in cases inoss europe insurgence cases across europe. Some of it is due to vacationers partying on vacation and bringing it home to their friends. And alarming increase in the number of cases. The reassuring thing is we are not seeing an increase in the death toll to anywhere near what we had in march or april. It is spread through the younger population which is not getting infected as badly for the moment. The alarming thing or the worry spreadshappens if it back among the more vulnerable part of the population . As it did in the spring. Matt what does this mean for plans to get back to work . Both in terms factory workers have already gone back and in the city, we are starting to see some whitecollar workers return as well. It is really tricky. Employers, even the office workers, those employers want to see people coming back to their desks to some extent. The tricky thing is they want people to come back but not too many because it complicates things from a social distancing standpoint. And others are targeting 50 capacity in their buildings which will help get things somewhat back to normal but you have to manage that in a tricky balance. You encourage people to come back and say it is fine. We have safety precautions. You dont want everyone rushing back because then you have complications. Eric, thanks very much. Tracking the latest on the global coronavirus pandemic. Let us get an update. Here is laura wright. Laura donald trump has promised a sharp cutback on americas ties with china. The president wants to punish u. S. Companies. That puts him in sharp contrast with his president ial rival, joe biden. He accuses him of being soft on china. Germanys debt spending may become the new normal. The finance ministers said the economy should wont be able to return to a balanced a budget anytime soon. Chancellor Angela Merkels<\/a> government is set to borrow about 218 billion euros to counter the virus crisis and organize its economy. Argentina has officially emerged from its default. Raised the country to a triple c plus. Is the culmination of more than four months of negotiations with argentinas biggest creditors. Securities that have been in default since may. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna . Matt . Matt laura wright in london. German chancellor Angela Merkel<\/a> is considering the countrys position on the nord stream 2 type line following the poisoning of the kremlin critic. The foreign minister has warned that berlin could change its backing for the project underscoring the escalating tensions with moscow. Speaking exclusively to bloomberg, polands Prime Minister<\/a> describes the decision as a nobrainer and says this navalny case should be a final wakeup call for germany. Now with the case of mr. Navalny, i think it should be a nobrainer. Is a very sad example of how russia is treating its citizens and opposition leaders. This should be condemned and not only condemned but there should be very strong sanctions and interventions following suit. Believe, germans i think saying the decisionmakers will change i the sames token, they admitted that this is a political project. Without political involvement, the project would already be abandoned. I mean the nord stream 2 project. Is clearly threatening intervention. And with what he did to mr. Navalny, the should be a final wakeup call for germany in terms of the eu and german attitude towards nord stream 2. Do you think germany would be able to or what will the consequences be for germany, poland, and the eu if they did cut off work on nord stream 2 . Would it be able to get through the winters . Of course. We have a lot of connectivity. This project is dangerous for ukraine because they will be completely cut off from their transit fees and their transit capacities. They have a gas Pipeline System<\/a> that was built to transit gas to western europe. With this being obsolete, they will experience huge problems. And at the same time, for the first time there will be a situation where Russian Troops<\/a> and russia will be able to march into any territory in the east because they will no longer be dependent on the gas Pipeline System<\/a>. Its 85ream 2 with billion cubic meter of gas and mr. Navalny, a political threat is also a geopolitical threat to this part of the world and that should be stopped as quickly as possible. Was the polish Prime Minister<\/a> speaking exclusively to bloomberg. Of next on the program, the bank of englands chief economist urges the government to push back pressure on its job scheme. Others say that will be a disaster. We speak to other economists calling for an extension. We will speak to the ceo of makeuk. This is bloomberg. A it has been discussed for long time. There is a notion of inequality. And start chances to participate and stark chances to participate. There is a big role for the states in that in participating in participating in the transition. It is not only printing money and putting it out there but making sure it has a directionality including the environment and good jobs. Speaking ats maya the brussels economic forum. She is the secretarygeneral of the German Advisory Council<\/a> on global change. Our reporter, maria tadeo is also there moderating a panel. She is joined by the European Commission<\/a> executive Vice President<\/a> right now. There are a bunch of Different Things<\/a> going on there. , the woman you see speaking on your screen, will be there as well as a commentator, martin. Interesting conversation taking place in brussels. Interestingnother conversation around support provided to the u. K. Economy. Continuing support for jobs threatened by the pandemic risks allowing a necessary process of adjustment. A similarconsidering move. The u. K. Is under pressure to do the same. Makeuk,vey conducted by 62 of manufacturers say they support an extension with almost a third saying they plan to cut jobs in the next six months if in october. Ends now, we can speak with stephen phipson, the ceo of makeuk. Good to speak to you. We heard a little bit about the case as to why you are campaigning for the extension of the furlough. But what do you think of the view that some of these jobs just are not coming back . Stephen good to talk to you. Comerms of the job scheme it has been incredibly successful and very helpful during this time. What we are saying now is we understand the government is under some pressure to bring this to a close and we are in that tapering phase but there are critical sectors where the recovery is taking longer. Particularly in Commercial Area<\/a> and space manufacturing. A very successful sector in the u. K. As well as automotive undergoing structural changes there. You could also make the case for foundational Industries Like<\/a> steel. As these particularly interesting sectors, those that are so vital, are taking longer to recover, we inc. There is a real case to be made for some sect oral support similar to what we are seeing in other European Countries<\/a>. For those areas that are so valuable. If you take automotive and aerospace in the u. K. , they account for nearly 6 billion pounds of our innovation, our r d. These are very valuable jobs to the you to the economy. You represent these giant manufacturers. I know a lot of small businesses, craftsman in great , little companies that have had to basically shut up and iming this crisis not sure they will be able to open their doors again. Stephen we represent the spectrum of companies. We have thousands of manufacturers with membership. They range from the large to the small. The critical thing about the Small Companies<\/a> is in the media we also we often report the headlines from the big companies. But it is their supply chain suffering the most. If you look at one of the large it isft companies, multiplied by five in terms of the supply change. Sectorallling for a approach so the government can approach support those sectors so important to our economy going forward. Anna i understand your focus on manufacturing. That is what your organization does. If you ask the government to pick sectors, they will have to draw a line somewhere. There will always be those on,nesses that say hang how come they get support and we dont . Maybe that is why other organizations are going for something different. They say continue to support businesses in general but at a lower level. With that not be a better approach . Bephen there needs to continued support for the general business community. What we are trying to call out is there are some incredibly valuable sector with sectors with highly skilled employees. Has had a knock on effect of the whole Manufacturing Base<\/a> when we look at changes in the Automotive Market<\/a> for example. Coupled with the fact that demand is down. There is a really strong case to preserve those. Other sectors need similar support. We dont deny that. We understand bill very clearly and in our discussions with treasury, there needs to be an end to the Job Retention<\/a> scheme. What we are calling for is to examine certain sectors and let us look at protecting those sectors. Especially if we want to grow our way out of this in the next year. We have to make sure that these highly skilled jobs are still there and they are not redeployed to another sector. So that we can grow from this base. Matt i just want to quickly ask will there be a way for u. K. Manufacturers that want to sell into the eu to open small bases in europe and finish products and get them out without tariffs . Or are european consumers just going to have to stop buying u. K. Products after january 1 . Stephen the situation with europe is a highly integrated one. There is a lot of trade that goes back and forth that has to do with manufactured parts. We have last 25 years, become highly integrated. You have heard terms like just in time which is why we need frictionless trade at the border. Lookingill start elsewhere for their supply chain as well as finished goods. It is complicated. We have Many Companies<\/a> that have set up european operations. Based largely it on an integrated supply chain route. Then sellingbe per finished goods. And that is the point we have been making to government. We will see how much friction we end up there. Stephen yes, we will. ,nna coming up on the program brexit is back in the spotlight with concerns over no deal seeping into sterling. Live, the view of market lori cooper. Thats next. This is bloomberg. Anna welcome back to the European Market<\/a> open. 54 minutes into the trading session that has retreated to the downside. We are down about 0. 2 on the stoxx 600. Sterling declines are piling up as johnson increases the odds of leaving the eu without a deal. Coupled with ramping up of trade tensions making it feel like 2019 all over again. Let us check in with laura cooper from our market live team. Why 2019 . I think that is the case given the fact that we have seen a number of ultimatums and standoffs over the last four years and what it has come down to is down to the wire and then a deal is reached. What we are is political posturing. The currency is experiencing a pressure valve. Markets are telling us that there is a degree of complacency because they are likely to see some kind of lastminute deal once again. If that does not prove to be the case and we do see a no brexit materialize, currency well resolved. For now, we can look back at 2019 as a guide. Poundyou know, we see the weaken into the possibility of a no deal brexit. That makes sense. We see the euro strength and as the rescue package was put together and the central bank seems to be holding. But why is it europound jumping . Aen i was looking to buy cottage in devonshire, it was . 93 and now we are below . 90. Why wont it go back higher . I think it is likely to go higher. It is a better proxy for brexit risks because it strips out the dollar weakness that has dominated the cable pair. Looking back at 2019, we saw eurosterling reach the handle. It could again be the case this time. Why we are seeing it remains subdued is because the brexit risks are not being fully priced in in terms of the currency market and there is likely still room to run on the euro side. That depends on the ecb this week. Matt i want to point out that i did not get to purchase that because it was still too expensive. Lara cooper from the bloomberg mliv team. This is bloomberg. Francine President Trump<\/a> vows to further disentangle the u. S. From china. Sterling slides as Boris Johnson<\/a> says he is prepared to walk away from the eu without a brexit deal. Brexit negotiator calls for realism ahead of trade talks. Angela merkel considers taking action against nord stream 2 after the poisoning of putin critic alexei navalny. 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